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Sued by bloomfield financial group llc


bk85
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Date of alleged loan: 5/15/2013

Date served: 05/06/2018

Dated of answer and affirmative defenses:05/24/18

Date of answer to affirmative defenses:6/1/2018

Pretrial Conference:6/19/18

I am currently being sued by Bloomfield financial group llc for a kabbage business loan in district court in Michigan. I have already been to pretrial conference and mentioned 2.113 f 1 and the judge informed me that i must make this by motion of more definitive statement. I informed the judge that i have it ready to file today and Plaintiffs counsel requested to amend complaint. The judge ordered the agreement be attach by amendment within 7 days. He also ordered that i respond with my amended answers and affirmative defenses within 7 days upon receiving the amended complaint. That all witnesses and exhibits are due within 14 days and 90 days for discovery. This was a savior as i kinda messed up my original affirmative defenses. Also it gives me time for interrogatories on the structure of Bloomfield Financial Group LLC. This agreement i assume was made digitally. My main concern is that i believe this attorney owns Bloomfield Financial Group LLC and is filing this complaint on his own behalf through a shell LLC. I believe this to be a violation of  MCL 450.681 that is referenced below and highlighted in red.

If  anyone has suggestions on how to prove this that would be great. Also any help with the case would be appreciated. Can i call opposing counsel as witness?

450.681 Practice of law by corporations and voluntary associations prohibited; exceptions; penalty.

Sec. 1.

It shall be unlawful for any corporation or voluntary association to practice or appear as an attorney-at-law for any person other than itself in any court in this state or before any judicial body, or to make it a business to practice as an attorney-at-law, for any person other than itself, in any of said courts or to hold itself out to the public as being entitled to practice law, or render or furnish legal services or advice, or to furnish attorneys or counsel or to render legal services of any kind in actions or proceedings of any nature or in any other way or manner, or in any other manner to assume to be entitled to practice law or to assume, use or advertise the title of lawyer or attorney, attorney-at-law, or equivalent terms in any language in such manner as to convey the impression that it is entitled to practice law, or to furnish legal advice, services or counsel, or to advertise that either alone or together with or by or through any person whether a duly and regularly admitted attorney-at-law, or not, it has, owns, conducts or maintains a law office or an office for the practice of law, or for furnishing legal advice, services or counsel. It shall be unlawful further for any corporation or voluntary association to solicit itself or by or through its officers, agents or employees any claim or demand for the purpose of bringing an action thereon or of representing as attorney-at-law, or for furnishing legal advice, services or counsel to a person sued or about to be sued in any action or proceeding or against whom an action or proceeding has been or is about to be brought, or who may be affected by any action or proceeding which has been or may be instituted in any court or before any judicial body, or for the purpose of so representing any person in the pursuit of any civil remedy. Any corporation or voluntary association violating the provisions of this section, and every officer, trustee, director, agent or employe of such corporation or voluntary association who directly or indirectly engages in any of the acts herein prohibited or assists such corporation or voluntary association to do such prohibited acts shall be guilty of a misdemeanor, and shall be punished by a fine of not to exceed 1,000 dollars or by imprisonment for a period of not to exceed 6 months, or by both such fine and imprisonment, in the discretion of the court. The fact that such officer, trustee, director, agent or employee shall be a duly and regularly admitted attorney-at-law shall not be held to permit or allow any such corporation or voluntary association to do the acts prohibited herein nor shall such fact be a defense upon the trial of any of the persons mentioned herein for a violation of the provisions of this section. This section shall not apply to any corporation or voluntary association lawfully engaged in a business authorized by the provisions of any existing statute, nor to a corporation or voluntary association lawfully engaged in the examination and insuring of titles of real property, nor shall it prohibit a corporation or voluntary association from employing an attorney or attorneys in and about its own immediate affairs or in any litigation to which it is or may be a party, or from employing an attorney or attorneys to render legal aid without charge to any employes of such corporation or voluntary association, nor shall it apply to organizations organized for benevolent or charitable purposes, or for the purpose of assisting persons without means in the pursuit of any civil remedy, whose existence, organization or incorporation may be approved by the circuit court of the circuit in which the principal office of said corporation or voluntary association may be located. Nothing herein contained shall be construed to prevent a corporation from furnishing to any person, lawfully engaged in the practice of the law, such information or such clerical services in and about his professional work as, except for the provisions of this act, may be lawful: Provided, That at all times the lawyer receiving such information or such services shall maintain full professional and direct responsibility to his clients for the information and services so received. But no corporation shall be permitted to render any services which cannot lawfully be rendered by a person not admitted to practice law in this state nor to solicit directly or indirectly professional employment for a lawyer.

 

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45 minutes ago, bk85 said:

I believe this to be a violation of  MCL 450.681 that is referenced below and highlighted in red.

I disagree.  Look at the very first sentence:  "It shall be unlawful for any corporation or voluntary association to practice or appear as an attorney-at-law for any person other than itself in any court"

Nothing in that section prohibits and actual attorney from owning a business and representing it.  Not even the single sentence you highlighted.  In fact the first sentence outlines he CAN represent his own company as an attorney.  What that highlighted sentence states is that merely having an attorney as an owner/trustee etc. of the corporation does not allow the business to represent OTHERS or to offer legal advice.  It does not mean a licensed attorney cannot represent a business he owns.

52 minutes ago, bk85 said:

Can i call opposing counsel as witness?

My guess is no.  You would have to be REALLY skilled at questioning to pierce the corporate veil and get this admitted by challenging his statements and evidence.  

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56 minutes ago, Clydesmom said:

I disagree.  Look at the very first sentence:  "It shall be unlawful for any corporation or voluntary association to practice or appear as an attorney-at-law for any person other than itself in any court"

Nothing in that section prohibits and actual attorney from owning a business and representing it.  Not even the single sentence you highlighted.  In fact the first sentence outlines he CAN represent his own company as an attorney.  What that highlighted sentence states is that merely having an attorney as an owner/trustee etc. of the corporation does not allow the business to represent OTHERS or to offer legal advice.  It does not mean a licensed attorney cannot represent a business he owns.

My guess is no.  You would have to be REALLY skilled at questioning to pierce the corporate veil and get this admitted by challenging his statements and evidence.  

Sorry the paragraph was so large it was hard to comprehend. I now went over it again and see your point. Thank You for your posted.

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56 minutes ago, Goody_Ouchless said:

I don't see anything about this not being your debt, so you are calling this person so they can take the stand and confirm that it's your debt?

 

I proof read what clydesmom suggested and confirmed it and have no intention of calling them anymore.

But as for the debt i have no knowledge of it as i was working a full time job when this loan was created. During pretrial conference the Plaintiff's attorney said this is a business loan for bksales.com and after research i see it is a promotional products business in Florida and i have lived in Michigan my whole life.They say i made a personal guarantee on this account which is not true. I am currently just waiting to see what this agreement looks like and if it is even signed. After researching Kabbage INC i see they are all digital and loans are issued instantly. So i am planning on questioning if identification was validated before initiation of the loan. Im just stressed out over this and trying to figure out how to proceed.

 

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40 minutes ago, Clydesmom said:

How much are they suing you for?   This may call for a lawyer to defend as it could get complicated in District Court.

They are suing for $926 in district court. 

I found an old agreement online from 2015 https://www.lawinsider.com/contracts/VtZdVAsY9og0T0Aq6W7kA/nef-enterprises-inc/1530981/2017-01-27

I wouldn't think it changed to that so i assume it was the same or worse in 2013.

The personal guarantee is not of the amount owed but of the merchants performance.

There also is an arbitration clause in there agreement. 

If anyone could review and let me know:

Any suggestions on motions?

Affirmative Defenses?

Would be greatly appreciated.

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This is what the personal guarantee section states:

Owner's Personal Guarantee of Merchant's Performance of Merchant Contractual Covenants. Owner personally guarantees the performance of all of the covenants of Merchant in this Agreement, specifically including the Merchant Contractual Covenants above. (Owner does not absolutely guarantee that sufficient future receivables will be generated or Proceeds collected to equal the Specified Amount sold to Company.)

Section 1.2. Merchant’s Contractual Covenants and Representations; Further Inquires. Covenants. You agree:

  (i) Not to use any amount loaned for personal, family or household purposes and not to repay us from any consumer account;
  (ii) Not to materially change the nature of the business that you conduct from the type of business originally disclosed to us in connection with this Agreement and, unless we are adequately notified in advance, to conduct your business substantially in accordance with past practices;
  (iii) To take all steps necessary to provide us with access to view the activity in your Business Payment Account, Bank Account and marketplaces where you do business and to such other accounts and sales and shipping data as we deem necessary and appropriate, for the purpose of monitoring your business activity and finances;
  (iv) Not to reduce or remove, or cause anyone to reduce or remove, our access, once granted, to your Business Payment Account, Bank Account, marketplaces where you do business and such other accounts and sales and shipping data as we have deemed necessary and appropriate;
  (v) With regard to information about any marketplace or other service provider that you provided to us to determine the amount of your Loan, to notify us promptly if the details of your account with such marketplace or other service provider changes, you open a new account or you close your account
  (vi) To use your Business Payment Account in a volume consistent with the level of transactions you processed through such account(s) when you received your Loan, or otherwise ensure that funds sufficient to satisfy your obligations under this Agreement are deposited into your Bank Account;
  (vii) To maintain a minimum balance in your Business Payment Account or Bank Account, as appropriate (as required by Section 1.3 below);
  (viii) To collect on your sales promptly, in compliance with all applicable federal, state and local laws, rules and regulations and consistent with your past collection practices;
  (ix) To make payments to us (in U.S. dollars) on the applicable Payment Due Date"
  (x) Not to take any action to discourage the use of your Business Payment Account and not to permit any event to occur that could have an adverse effect on the use, acceptance or authorization of your Business Payment Account for the purchase of services and/or products by your customers;
  (xi) Not to open a new account other than the Business Payment Account or Bank Account (collectively, the "Accounts") into which your sales will be deposited and not to take any action to cause future sales to be settled or paid to any account other than the Accounts;
  (xii) Not to sell, dispose, convey or otherwise payment your business or assets without our express prior written consent and the prior payment or assumption of all of your obligations under this Agreement pursuant to documentation reasonably satisfactory to us;
  (xiii) Not to take any intentional action that would substantially impair or reduce your generation or collection of accounts receivable adequate to satisfy your obligations under this Agreement without our prior written permission;
  (xiv) Not to terminate your authorization of scheduled debits in Section 1.3, stop payment on any debit authorized pursuant to Section 1.3, claim that a debit transaction pursuant to Section 1.3 is unauthorized, or seek a refund, return, chargeback or dispute of a credit card transaction related to a payment under Section 1.3; and
  (xv) To notify us promptly if, with regard to any Business Payment Account or Bank Account, the details of your account change, you open a new account or you close your account.
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4 hours ago, bmc100 said:

Start by posting the complaint and your answercomplaint.pdf.

Here is the complaint and first answer. My address has been whited out.

The judge ordered the agreement be attached within 7 days. He also has allowed me 7 days to response and amend by answer and affirmative defenses upon reciept.

He has also required Plaintiff throw in all his cards (witnesses and exhibits) within 14 days.

anwser.pdf  complaint.pdf

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15 hours ago, bk85 said:

There also is an arbitration clause in there agreement. 

@bk85 It's critical to understand that this is not a consumer loan. That means that consumer rules to cap your fee in AAA or JAMS are not applicable. CIC member LaneBlane from Minnesota was sued under a similar contract. Her motion to compel arbitration was granted. She's currently in JAMS, where the junk debt buyer (JDB) has effectively stymied the process by refusing to advance or reimburse the $600 JAMS demand fee or the $2500 initial arbitrator's fee. The JDB insists that the fees be split and then the arbitrator will include the fees when the award is issued. This may go back into court if it gets bounced from JAMS for nonpayment. She's ponied up $600 so far. Her suit is for $6700.

From the Kabbage contract you linked to:

"Section 1.6. Arbitration (Agreement to Arbitrate Claims).

 

Except as otherwise stated below, any Claim (as defined below) will be resolved by binding arbitration pursuant to (a) this Arbitration Provision and (b) the code of procedure of the national arbitration organization to which the Claim is referred (as in effect when the Claim is filed). Claims will be referred to either Judicial Arbitration and Mediation Services (“JAMS”) or the American Arbitration Association (“AAA”), as selected by the party electing to use arbitration. Streamlined arbitration procedures will be used if available. . . ."

"Arbitration Procedure and Costs. For a copy of relevant codes of procedure, to file a Claim or for other information about JAMS and AAA, write them, visit their web site or call them at: (i) for JAMS, 1920 Main Street, Suite 300, Irvine, CA 92614, info@jamsadr.com, http://www.jamsadr.com, or 1-800-352-5267; or (ii) for AAA, 1633 Broadway, 10th Floor, New York, NY 10019, websitemail@adr.org, http://www.adr.org, or 1-800-778-7879. If either party fails to submit to arbitration following a proper demand to do so, that party will bear the costs and expenses, including reasonable attorneys’ fees, incurred by the party compelling arbitration. Any physical arbitration hearing will be held in the federal judicial district selected by Merchant. No matter which party initiates the arbitration, we will advance or reimburse filing fees and other costs or fees of arbitration. Each party will initially be responsible for its own attorneys’, experts’ and witness fees and related costs and expenses. Unless prohibited by law, the arbitrator may, applying applicable law, award fees, costs and reasonable attorneys’ fees and expenses to the party who substantially prevails in the arbitration. The allocation of fees and costs relating to an appeal in arbitration will be handled in the same manner. For an explanation and schedule of the fees that may apply to an arbitration proceeding, please contact the organizations at the addresses above. The appropriate fee schedule in effect from time to time is hereby incorporated by reference into this Arbitration Provision. The cost of arbitration may be higher or lower than the cost of bringing a Claim in court, depending upon the nature of the Claim and how the arbitration proceeds. Having more than one Claim and holding a physical arbitration hearing can increase the cost of arbitration.

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Might be wise to explore settling, since amount is relatively small and it seems they have the right party. Technical word games don't really work anymore (if they ever did), but if you've got the time, maybe you'll get a judge with zero tolerance for ambiguity who will require an actual video of you applying for this loan. Of course, if the payment history attached to the complaint can be traced to you. it's game over.

  

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19 hours ago, bk85 said:

I found an old agreement online from 2015 https://www.lawinsider.com/contracts/VtZdVAsY9og0T0Aq6W7kA/nef-enterprises-inc/1530981/2017-01-27

I wouldn't think it changed to that so i assume it was the same or worse in 2013.

Don't assume this is the same agreement as your loan.  The agreement you linked to is actually a Celtic Bank loan agreement that's serviced by Kabbage.    If the Kabbage loan in your case is from 2013, it may be a Merchant Cash Advance Agreement (MCA). There's a huge difference.

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20 hours ago, bk85 said:

They are suing for $926 in district court. 

I found an old agreement online from 2015 https://www.lawinsider.com/contracts/VtZdVAsY9og0T0Aq6W7kA/nef-enterprises-inc/1530981/2017-01-27

I wouldn't think it changed to that so i assume it was the same or worse in 2013. 

The personal guarantee is not of the amount owed but of the merchants performance.

There also is an arbitration clause in there agreement. 

If anyone could review and let me know:

Any suggestions on motions?

Affirmative Defenses?

Would be greatly appreciated.

As I mentioned earlier, don't assume the sample agreement you linked to is going to be the same as the agreement in question.  From my personal experience, a Kabbage agreement from 2013 may end up being a Merchant Cash Advance (MCA).  The two are very different.  There can also be multiple agreements.

Before you can do anything, you'll have to get your hands on a copy of the agreement itself. 

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I spent a little more time delving into what you have, as well as the accounting the Plaintiff attached to their complaint.

What you likely have is a Kabbage Merchant Cash Advance Agreement which is commonly referred to as an MCA.  These are not loans.  Kabbage is essentially purchasing your business' future receivables/sales.  These may be specific to money you take into your Paypal account.

The loan appears to have originated on May 30, 2013.  On this date, the OC deposited $700 into a Paypal account.  There was a payment in the amount of $152 on August 1, 2013.  The other payments made were all reversed.  This includes $186.34 on September 25, 2013, $503.68 on October 16, 2013, and  $662.35 on November 15, 2013.

The total amount charged off on February 28, 2014 is $1,852.  In addition to the $926, there's also a $660 principal charge off, a $21 monthly balance fee charge off, and a $245 late fee charge off.

If someone takes out an MCA for their business, and their business has been closed and is no longer taking in receivables, there's a chance you'll be off the hook - even with a personal guarantee.  If there's no longer any cash flow, there's nothing to collect:  See:  https://www.secondwindconsultants.com/defaulting-on-a-merchant-cash-advance-loan

 

 

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22 hours ago, bk85 said:

During pretrial conference the Plaintiff's attorney said this is a business loan for bksales.com and after research i see it is a promotional products business in Florida and i have lived in Michigan my whole life.They say i made a personal guarantee on this account which is not true.

bksales.com is owned by a man with the initials B.K.  (I won't mention the name here).  His first name and last name do not match yours.

If the agreement is for this business in Florida, you should be able to clear this up once you receive a copy of the agreement from the Plaintiff.  Because you and the owner of this website don't share the same name (not even similar), it's hard to believe this involves a case of mistaken identity.

 

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7 minutes ago, bmc100 said:

Did they attach the assignment docs and affidavits to the complaint?

No assignments, affidavits, or agreement were attached to the complaint. Only the account summary which doesn't even have the account number on it.

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2 hours ago, bmc100 said:

This case is over in your favor before it begins. MCR 2.113(F) - the Plaintiff needs to attach the agreement to the complaint. This case is so weak.

I went to pretrial conference with a (Motion for More Definitive Statement) in regards to 2.113 (F)  and the judge was going to allow me time to address the issue and the attorney agreed to amend his complaint with agreement within 7 days. So i am waiting until then before i file a ( Motion for Summary Disposition). So upon receipt of there amended complaint i have 7 days to amend my answer and affirmative defenses in response or file a motion. 

So i should prepare an affidavit denying this debt to submit with my answer and affirmative defenses?

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1 hour ago, bk85 said:

the attorney agreed to amend his complaint with agreement within 7 days.

I was going to respond to bmc's "case is so weak" comment by saying all the attorney has to do is amend the complaint to include the agreement, but the attorney himself beat me to it.

Don't be fooled into thinking this is a slam dunk in your favor. The judge has already demonstrated he is willing to be fair to both sides. (Or if you like to wear tin hats, you probably see the judge allowing the plaintiff to amend its complaint as the judge has been paid off by the plaintiff.)

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